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CHINA GAS HOLDINGS LIMITED Corporate Presentation July 2013.

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Presentation on theme: "CHINA GAS HOLDINGS LIMITED Corporate Presentation July 2013."— Presentation transcript:

1 CHINA GAS HOLDINGS LIMITED Corporate Presentation July 2013

2 China Gas Overview Natural Gas Services Operator Operates in 184 city concessions (not inclusive of 11 city concessions owned by Fortune Gas, the acquisition of which is expected to complete soon) with 30-year monopolistic operating right each Possesses intermediate and arterial gas pipeline networks of 37,408 km, serving more than 8.5 million household users and 52,050 industrial and commercial users LPG The largest LPG retailer in PRC Owns 8 LPG receiving terminals and 285,000 m 3 of LPG storage capacity in PRC Distributes LPG in 12 provinces such as Guangdong, Guangxi, Fujian, Zhejiang and Jiangsu Owns a 49% stake in Panva Gas which controls 450 self-owned retail stores and 120 franchised outlets located in provinces such as Jiangsu, Hubei, and Zhejiang. The Company retains an option to acquire the remaining 51% of Panva Gas 2

3 Natural Gas – Business Model Natural gas fields Assets owned by the Group: Main pipelines Branch pipelines Pressure regulating boxes Switches Processing stations * Customers’ pipelines which are not owned by the Group are within the customers’ premises and are not highlighted in this diagram National or provincial pipelines City gate Storage tanks (spherical or cylinder) Residential households* Car refueling station Commercial users* 3

4 Natural gas business operates on a cost-plus pricing model Natural Gas Pricing System END-USER TARIFF COMPONENTS Exploration Wellhead price Transportation Transmission tariffs Distribution Distribution cost + Return NDRC ApprovalLocal Price Bureau Approval 2 main sources of revenue Gas connection: one-off payment mainly from residential users, less so from industrial and commercial users Sale of piped gas: recurring income at tariffs approved by the local governments 4

5 CNG/LNG Refueling Stations Strongest growth Most profitable Currently owns: 165 CNG stations in 38 cities & 5 LNG stations in 3 provinces 5

6 OPERATIONAL PERFORMANCE – NATURAL GAS 6

7 PIPED GAS SALES VOLUME Total sales volume (million m 3 ) PeriodVolume Growth: Total FY1321.6% FY1225.0% PeriodVolume Growth: Natural Gas FY1322.7% FY1225.0% 7

8 NATURAL GAS SALES VOLUME: CUSTOMER BREAKDOWN Natural gas sales volume (million m 3 ) Customer Sales Volume Growth in FY13 % of Total Volume FY13FY12 Residential18.5%12.2%12.7% Industrial23.0%66.8%66.6% Commercial32.1%12.4%11.5% CNG Stations14.5%8.6%9.2% 8

9 NATURAL GAS CUSTOMER & TARIFF DATA Customer Growth FY13 Portfolio Total FY12 Portfolio Total Change from FY12 OrganicAcquired Residential1,225,86325,2348,438,9917,187,89417.4% Industrial51882,1551,62932.3% Commercial6,38920549,89543,30115.2% CNG/LNG Stations37–17013327.8% Customer Tariffs (ex-tax) (RMB / m 3 )FY13FY12 Change from FY12 Residential2.182.12+2.83% Industrial2.452.36+3.81% Commercial2.482.46+0.81% CNG Stations2.732.65+3.02% 9

10 OTHER OPERATIONAL DATA FY13FY12Change from FY12 Residential Connection Fee (RMB per customer) 2,5502,4733.1% Urban Population Covered (million)65.762.55.1% Household Penetration Rate42.0%37.4%12.3% Total Intermediate & Main Pipelines (km)37,40833,50511.6% 10

11 NEW CITY CONCESSIONS WON 27 new concessions since 1 st April 2012 bringing the total to 184 city gas concessions as at 15 June 2013 (not inclusive of 11 city concessions owned by Fortune Gas) New concessions won in Liaoning, Heilongjiang, Hubei, Inner Mongolia, etc. Focus on industrial cities and customers, high volume users More concessions, largest portfolio in China 11

12 NATURAL GAS PROJECT LOCATIONS 12

13 POLICY ENVIRONMENT In Oct. 2012, NDRC issued the natural gas application policy, promoting the use of natural gas (CNG/LNG) for vehicles and vessels The PRC’s “12 th Five-Year Plan” for energy development published in Jan. 2013 indicates natural gas supply in China will surpass 260 billion m 3 by 2015, increasing by 20% per year. Strong government support 13

14 OPERATIONAL PERFORMANCE – LPG 14

15 LPG: DOWNSTREAM RETAIL FOCUS FY13FY12 Sales Volume (tonnes)889,342894,000 Gross Margin (%)5.7%5.5% Operating Margin (%)-0.2%1.0% Largest downstream retailer of LPG in China (via 49% owned Panva Gas) Shifting the LPG focus from wholesale to downstream business to improve overall profitability and cost efficiency 15

16 16

17 FINANCIAL PERFORMANCE 17

18 FINANCIAL SUMMARY – INCOME STATEMENT HK$ millionsFY13% changeFY12 Revenue21,250.3 12.2% 18,933.6 Piped Gas Sales9,348.9 22.0% 7,662.5 Connection Fees3,300.7 17.7% 2,803.7 LPG Sales7,959.2 -0.4% 7,992.8 Others641.4 35.2% 474.5 Gross profit4,374.0 21.3% 3,605.7 Profit after tax2,041.3 78.8% 1,141.9 Net profit attributable to shareholders of the Company 1,764.384.9%953.9 Basic EPS (HK cents)39.3780.9%21.76 Basic DPS (HK cents, full year)8.48116.3%3.92 Dividend payout ratio21.5%+3.5%pts18.0% 18

19 FINANCIAL SUMMARY – BALANCE SHEET HK$ millionsFY13FY12 Total Assets 35,367.631,874.4 Total Equity 12,836.710,799.0 Shareholder's Equity 11,484.69,742.2 Cash 4,948.85,528.2 Short-term Bank Debt 9,082.18,963.4 Of which LPG trade finance related facilities 4,805.35,097.6 Long-term Bank Debt 6,862.76,406.8 Net Gearing Ratio* 48%44% * Net gearing ratio is computed based on total net borrowings (total borrowings less cash and trade finances in relation to LPG business) as a percentage of net assets 19

20 FINANCIAL SUMMARY – MARGINS FY13FY12 EBIT Margin15.2%13.5% EBITDA Margin18.7%16.7% Net Profit Margin9.6%6.0% Return on Equity15.4%9.8% 20

21 FY2014 – 2015 GUIDANCE 21

22 FY2014 - 2015 Guidance Enhance organic growth in existing city gas projects Increase industrial and commercial customer connections as upstream supplies increase Expand “Hub-Satellite City” investment program to add more concessions to our portfolio Expedite the rollout of CNG and LNG stations for vehicles and vessels Focus on higher margin retail LPG distribution For the year ended March 31FY2014FY2015 Total piped gas volume (m 3 )8.5 bn10 bn New residential connections1.3 m CNG stations370600 Downstream LPG sales (including Panva Gas)900,000 tons1.1m tons 22

23 DISCLAIMER 23 Statements in this presentation and handout that are not strictly historical are “forward-looking” statements. Forward-looking statements involve risks and uncertainties, including, but not limited to, continued acceptance of the Company’s product and services in the marketplace, competitive factors, new products and technology changes, the Company’s dependence upon third party suppliers and other risks detailed from time to time in the presentation, handout and other related documents. All the directors of China Gas jointly and severally accept full responsibility for the accuracy of the information contained in these materials and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in these materials have been arrived at after due and careful consideration and there are no other facts not contained in these materials, the omission of which would make any statement in these materials misleading. The materials and information in the presentations and other documents are for informational purposes only, and are not an offer or solicitation for the purchase or sale of any securities or financial instruments or to provide any investment service or investment advice.


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